Wow, what a blessing living in the most amazing city in the world. Indeed, the city is full of great food, the friendliest people, tremendous culture, history, art, music and most importantly love! We are ambassadors to our beautiful town. Consequently, this is a role that we take very seriously. We’re here to help and our business is based on that. (Homes San Miguel De Allende.) Talking often with foreigners around town, these are the 6 key questions about buying a home that come up most often:
1. I´m a foreigner, may I acquire a property in my name in Mexico?
Yes, any foreigner can acquire a property in Mexico. As long as an agreement is sent to the Ministry of Foreign Affairs to authorize the acquisition of the property. Therefore, the only properties that cannot be acquired by a foreigner are those which are in close areas to the Coast and the US/Mexico Border. Therefore, in these places the property rights are only acquired through a concession granted by the Federation. Consequently, as long as bought through a trust and held by a bank, it is no problem. (See the Article Property Rights for Buyers.) But for foreigners buying in San Miguel, none of this applies. You can buy property in your name directly just like in the United States with a few additional exceptions and document requirements. All standard procedure.
2. What documents do I need to buy property in Mexico?
Here are standard documents needed to present to the Notario when buying property in Mexico as a foreigner:
– Valid passport.
– Valid driver’s license (normally 2 forms of photo ID are required).
– Migratory document that accredits your legal stay in the country (tourist visa or temporary or permanent residency).
– Proof of residence address of home country in the form of a driver’s license or a recent utility bill.
– Personal information (full legal name, date of birth, place of birth, address, contact information, email and phone).
– Beneficiary information (full legal names, copy of passports or official IDs).
3. What function does a Notary Public serve?
The Notary Public is a government-appointed attorney responsible for the registering of real estate deeds with the Public Registry Office. It goes without saying, although the Notary is a lawyer, they do not act as your lawyer in this case. Indeed, they are representing the transaction: Buyer, Seller, and the State/Federal/Government. This is considered a prestigious position here in Mexico and several additional years of college are required beyond the law degree.
4. Do I really need a Real Estate Agent?
We smile when I hear this because as an investor in the United States, we avoid real estate agents. Therefore, as an investor, I always felt Agents got in the way, so to speak. (And terrible business people!) Mexico is different. In fact, Mexico is very different.
Real estate agents in Mexico do several things for you whether you’re buying or selling in Mexico. But not all real estate agents are the same in Mexico. Consequently, some cities in Mexico have an association of real estate agents. This is called AMPI, comparable to National Associated of Realtors (NAR) in the U.S. Agents and Brokers in AMPI are required to have a State issued real estate license.
Another key point, standards and practices are enforced, as well as codes of conduct, and MLS access. All of this is further integrity to the transaction. Real estate commissions in Mexico vary based on the City and State. Additionally, these rates range from 3% (Monterrey) to 10% (Acapulco). In San Miguel de Allende, real estate commissions are 6% plus IVA, which is a sales tax. This is normally paid by the seller, about 6.8% total. Interestingly, we are one of the few markets in Mexico priced in US dollars.
Competent and licensed real estate agents in San Miguel actually hold the integrity and continuity of the transaction together during the process here in Mexico. Having people you can trust is everything!
5. What kind of expenses and taxes do I have to pay?
Closing costs in San Miguel de Allende are maximum 5.2% of the purchase price, comprised of two separate fees. There is a 4% acquisition tax that is based upon the price of the real estate (for buyers). Additionally, there is 1.1% that is the Notary’s fees and City-required fees (recording fee, new city appraisal, etc.).
6. How do I protect my deposit?
Funds are held in segregated and insured Escrow accounts in the U.S. Obviously, these funds will have specific instructions as to what funds are to be dispersed and when. Funds flow from a US originating bank into a US escrow account and are dispersed from there. Therefore, no money comes into Mexico unless otherwise wanted. There is flexibility here!
– A Spanish sales contract with a courtesy English translation is written and presented to you.
– We will work with closing coordinators.
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Thó may be reached at: Tho@thoandlucia.com